Nielsen is looking to score more sports marketing dollars with its acquisition of Repucom, a sports research firm founded in Australia and now based out of the US.
Nielsen, which closed the deal on Tuesday, did not disclose the price tag, though German sports industry trade pub Sponsors reported it to be more than $100 million.
Three years ago, Nielsen consolidated its sports research marketing within a dedicated group in order to develop specialized offers.
Since then “its growth has been significant,” said Howard Appelbaum, president of Nielsen Entertainment.
In a time of commotion and disruption for the broadcast industry, live sports programming has served as a much-needed anchor. Global spending on sports sponsorships jumped from $35 billion in 2010 to $60 billion in 2016, and last year, 93 of the 100 most-watched TV programs in the US were live sporting events, said Appelbaum.
Repucom’s business consists of a sports research consulting service and a brand awareness tracking product called Sport24, which accounts for most of the company’s revenue.
Sport24 ingests million of hours of game footage and athlete interviews and automatically scours it for brand logos and images. A human review process, most of which happens in India, is used to quality-score the brand placement.
There’s an emerging startup space for companies that automatically scan social media feeds for brand images, but doing the same for TV is considerably more complicated.
Take a NASCAR race. Machine learning software might be able to register a brand’s logo on the side of a NASCAR car, but to a person watching the race on TV, that logo is nothing more than a blur.
The distinction may seem minor, but developing a reliable currency for sports sponsorships and marketing has implications around how much brands are willing to spend.
“We have always sought out the most innovative tools to measure the behaviors and preferences of our global fan base,” said Jason Kaufman, VP of research and analytics at the NBA and a client of both Repucom and Nielsen.
The NBA recently finalized plans to allow brands to sponsor team jerseys. In May, the Philadelphia 76ers became the first team to sign a jersey sponsor, StubHub, for $5 million per year over three years, according to ESPN.
But the league can only make that work if it demonstrates value. Or, rather, it could charge considerably more if it can demonstrate tangible value from logos on jerseys.
Having found a home in Nielsen, Repucom and its Sport24 currency will become a more valuable asset because it can be tied not just to verifiable logo placements during broadcasts but also to services like retail tracking from Nielsen Catalina Solutions and N-Score, the Nielsen celebrity endorsement index.
Nielsen also brings brands into the equation. Repucom has been trying to build out a brand presence, Appelbaum said, but until now it’s gained traction mostly with sports organizations like the NBA and English Premier League, two of its blue-chip clients.
“Combining the access [Repucom] has around Sport24 with our brand relationships will be great for Repucom’s business and Nielsen’s expansion plans,” Appelbaum said.
For example, one recent RFP from a global soccer organization asked its potential vendors (including both Nielsen and Repucom, competing independently at the time) to wrangle sponsors and media companies to simultaneously negotiate advertising and broadcast rights. Having those stakeholders at the table via Nielsen means that more advantageous deals can be arranged.
Nielsen’s ability to stretch Repucom’s sponsorship currency into consumer activity, like how Pepsi’s team sponsorships impact local soda sales, also “gives us a pretty strong hand,” said Appelbaum.
But challenges remain. Repucom’s Sport24 doesn’t cover streaming and digital channels, for instance. It’s a big hole.
The NFL recently signed broadcast deals with online platforms like Yahoo and Twitter, and the NBA’s China growth strategy leans heavily on the internet provider Tencent. Not to mention the sponsor value of shared highlight clips and social media images.
Appelbaum acknowledged that Repucom, and now Nielsen’s consolidated offering, are yet to account for the impact of digital channels or nonlive sports broadcasts on sponsor dollars.
“But it’s clearly a huge growth opportunity,” he said.
